Palm Oil Futures: Firm MDEX Curve Signals Ongoing Upside Risk

Palm oil futures are grinding higher with a firm, mildly upward MDEX curve, reflecting energy-led support and cautious optimism despite ample near-term supply. The structure points to modest bullish sentiment into 2027–28, but high Malaysian production and sluggish exports are tempering any aggressive rally.

The market currently trades in a tight MYR 4,500–4,650/t band across liquid 2026–27 contracts, with incremental gains along the curve suggesting improving medium-term fundamentals rather than a short‑squeeze. Stronger crude oil and energy prices are underpinning biodiesel demand expectations, while participants remain wary of Malaysian stock levels and competition from rival oils. Overall, price action indicates a market that is supported but not overheated, with pullbacks likely attracting commercial buying rather than triggering a deeper correction.

📈 Prices & Curve Structure

MDEX crude palm oil futures on 24 April 2026 closed broadly higher across the board. The front July 2026 contract finished at 4,597 MYR/t, up 18 MYR (+0.39% day-on-day), with similar percentage gains in the nearby strip. Further along the curve, percentage increases were larger, reinforcing a firmer forward structure.

The curve remains gently upward from mid‑2026 into early 2028, with an indicative uplift of about 120–150 MYR/t between July 2026 and early 2028 maturities. This signals expectations of slightly tighter balances or stronger demand over the medium term, rather than imminent surplus. At the same time, the relatively flat near‑term segment around 4,550–4,650 MYR/t suggests the market sees current fundamentals as broadly balanced.

Contract	Close (MYR/t)	Δ Day-on-Day	Approx. Close (EUR/t)
Jul 2026	4,597	+18 (+0.39%)	~920 EUR/t
Sep 2026	4,627	+29 (+0.63%)	~925 EUR/t
Jan 2027	4,603	+44 (+0.96%)	~920 EUR/t
May 2027	4,541	+50 (+1.10%)	~905 EUR/t

(EUR values use a rounded 1 EUR ≈ 5 MYR for illustration.)

🌍 Supply, Demand & External Drivers

Recent sessions show palm oil closely tracking the energy complex, with gains on 24 April driven in part by stronger crude oil benchmarks and improved sentiment in biofuels. Higher energy prices enhance the relative economics of palm-based biodiesel, lending underlying support to CPO valuations.

On the fundamental side, however, high Malaysian production and relatively weak export performance in early April are acting as a brake on price appreciation. Market commentary highlights strong output and low exports in the April 1–20 window, which risks rebuilding stocks and is prompting caution among traders. In addition, some profit‑taking in soybean oil on CBOT has dampened enthusiasm and limited follow‑through buying in palm oil, maintaining a more measured uptrend rather than a runaway rally.

📊 Market Sentiment & Positioning

The intraday highs across the active 2026 strip (4,621–4,645 MYR/t) and the relatively small daily percentage moves point to a market dominated by commercial hedging flows rather than aggressive speculative positioning. Liquidity is concentrated in the July–November 2026 contracts, where volumes far exceed those in the thinly traded 2028–29 maturities.

Reports from Malaysian derivatives trading desks emphasise that participants are balancing supportive cues from energy prices and rival oils against concerns over domestic inventory burdens. This is reflected in modest day-on-day gains for nearby contracts but stronger percentage rises in deferred positions, suggesting that hedgers are more willing to price in medium-term tightness than to chase short-term spikes.

🌦️ Weather & Production Outlook

No acute weather shock is currently dominating the palm oil narrative over the next few days. Key producing regions in Malaysia and Indonesia are entering a seasonally higher production phase, and near-term forecasts do not show disruptive extremes that would materially alter output expectations in the first instance. (Weather remains a latent upside risk if pronounced dryness or excessive rainfall were to emerge later in the season.)

Given the lack of immediate weather stress, traders are focusing more on export pace, policy developments in Indonesia, and biodiesel mandates than on short-term field conditions. This keeps the emphasis on demand-side drivers and stock dynamics in determining short-run price direction.

📆 Short-Term Price Outlook (3–5 Days)

• Bias: Mildly bullish but range‑bound, with support from firm energy prices and biodiesel demand.
• Expected range (MDEX active 2026 nearby): roughly 4,500–4,650 MYR/t (≈900–930 EUR/t), barring a sharp move in crude oil or rival oils.
• Key risks: Faster‑than‑expected export recovery (bullish) vs. confirmation of stock build in Malaysia (bearish); abrupt correction in crude oil prices (bearish correlation shock).

🎯 Trading Guidance

• Producers / Sellers: Consider layering in hedges on rallies towards the upper end of the current band (~4,600+ MYR/t, ≈920+ EUR/t) for Q3–Q4 2026 shipments, while keeping some volume unhedged in case energy-led strength persists.
• Refiners / Buyers: Use any dips back towards 4,500 MYR/t (≈900 EUR/t) in the front strip to secure nearby coverage, as the upward‑sloping curve and firm energy complex argue against a deep correction without a clear catalyst.
• Speculative accounts: Favor buying moderate dips rather than chasing breakouts, with tight stops below recent support and close monitoring of crude oil and soybean oil correlations.

📍 3‑Day Directional View (Key Exchanges, in EUR)

• MDEX CPO (Malaysia): Slightly firmer; likely to hold in the 900–930 EUR/t band with an upward tilt if crude oil remains supported.
• Linked EU palm oil import values: Expected to edge modestly higher in EUR terms, tracking MDEX and energy while also reflecting FX moves.
• China-linked palm futures (DCE proxy): Directionally supportive but vulnerable to any renewed weakness in soybean oil; watch for relative‑value shifts between oils over the coming sessions.